Chill Maadi

Are you having trouble sticking to a budget? Are you trying to save some of your paycheck each week/month but finding it impossible to do? Managing a personal budget is tough for everyone (remember, if it was easy everyone would have a fat savings account and/or no debt!) However, it IS possible if you follow these three easy guidelines.

The first rule to keep in mind is that you should never have more money going out than you have coming in. Sounds simple, but lots of people have more expenses than they have income. One contributor to this problem is “plastic” – you know, credit cards! Lots of people run up high credit card balances that they cannot pay off each month. It is okay, perhaps even a good idea, to use a credit card to help you establish good, strong credit. That means charging a small amount (what you know you can pay in full when the bill comes due) then paying off the balance. But it is not okay to make huge purchases for items that you could truly live without (like a new 50-inch flat-screen TV.)

Secondly, decide how much money you can afford to spend on non-essentials such as eating out for meals, going to movies or playing putt-putt. Once you have a specific amount in mind, set it aside and use it for those things and nothing else. When that money is gone, you can’t allow yourself to pull money from other places in your budget to spend on those non-essentials. As a side note, you should always pay yourself a little something out of every paycheck. This should not be considered a non-essential; in fact, quite the contrary. Even if all you can afford to deposit into a savings account is five dollars a week, it is better than nothing. You won’t miss small amounts and before you know it you will have a nice little chunk of change to cover emergencies or a special purchase. This will also keep you from having to use a credit card in those instances.

This brings us to the last tip, using your WILLPOWER! Again, if it were easy everyone would be doing it! It’s like eating only two cookies when you really want 10; it takes a lot of willpower. With your budget, you must exercise self-control to resist urges to spend money you don’t have or charge an item you will not be able to pay for later. This may be the most difficult task because just about anything we want can be easily had these days. Those with “good credit, bad credit, no credit” can buy cars, houses, and many other big-ticket items. Denying yourself takes amazing self-discipline but you can do it!

Personal budgeting can be an overwhelming task when you first set out to conquer it. However, following these three guidelines will help keep your budget manageable and help you maintain control over your finances. Don’t let them control YOU!

Payment history on credit accounts is the single biggest factor that contributes to your credit scores. In fact, 35% of credit scoring inputs are based on your payment histories.

Payment history measures your on-time payments for consistency. Specifically what the credit bureaus are looking for is that your account status remains in “current” status for each account. As long as your account remains in that current status, it will continue to report as a positive account.

Closing a positive account will be reflected on your credit bureau. The positive payment history will remain on your credit report for ten years, providing a boost to your credit scores. Of course, that benefit will fade over the years until the account finally drops off your credit report.

Conversely, a missed payment will plague your credit report for seven years. Missing one payment can cause your scores to drop immediately, as it signals financial distress. That negative mark will continue to reflect negatively for the next seven years, although the significance will fade over time.

One missed payment, if corrected, does not ruin your credit the way that it used to. While your score will be lower, you are not penalized quite as severely. Fair Isaac, the maker of the FICO credit scoring formulas, made that change as a part of its FICO 08 changes that were implemented in 2009. Lenders that do not subscribe to FICO 08 base their decisions on older models that do penalize more for a single delinquency.

While a thirty day delinquency is relatively minor by itself, multiple delinquencies signal a more desperate financial situation that is reflected in your rapidly dropping credit score. The more severe a delinquency, the more your credit scores will suffer.

Credit accounts generally charge off as noncollectable bad debts once they are 180 days delinquent. Specific federal rules on credit card accounts require this treatment of accounts in default.

If you are dealing with delinquencies, the biggest action that you can take to improve your scores is to restore late accounts to a current status. This is the single greatest impact that you can make to improve your damaged credit.

How Long Do Missed Payments Affect Me?

Missed payments have lasting negative impacts for seven years. That being said, they tend to affect you less over time. Consider the way that a black eye may heal. It looks worse immediately after it occurs and is clearly visible for several days. It then begins to slowly fade. After a couple of weeks, it disappears completely.

Missed payments work the same way. Your scores will still be impacted by missed payments for a full seven years. However, that impact is less substantial as the date of the missed payments gets further in the past.

Once seven years have passed, the missed payment is deleted all-together. If the account was closed or charged off, then it will disappear entirely at that time. If you were able to bring the account current, then it will revert to a positive status once the missed payment drops off.

Payment history is the single biggest factor in determining your credit scores. Taking steps to prevent or correct damage can be crucial to maintaining or rebuilding your credit. If you need help in this process, you should consider speaking with an Accredited Financial Counselor who can discuss your options with you.

When it comes down to stock market investing tips, stock market strategies are one of the most abundant and diverse concepts you will encounter. The reason that so many stock market strategies exist is because very investor buys stock shares using a method that works for them. Investment tips are nothing more than someone stating what stock shares look like they will work for their own stock market strategy. There really is no other way to go about finding a stock market strategy than to develop your own.

Every supposed guru under the sun will give you investing tips, but do those pay off more than they don’t? Most likely not, and the reason is that the stock market strategies of the ‘guru’ leave out one critical piece: timing.

Timing with the stock market entails when to buy and when to sell to gain the most advantageous (read economically pleasing) results. If you want to know how to invest stocks, then timing is really all you need to know. Why? Because every stock market strategy involves the basic ‘buy low sell high’ mentality.

Really, all the common stock market strategies consist of is a way to determine when the low and the high occur (or the reverse if shorting). If you can learn to buy stock shares when YOU feel the price is at a low point, a point where it will rebound from, then you already have one part of the puzzle.

It is important for you to learn to do this so you do not blind buy stock shares based on another person’s opinion. An opinion that is inherently risky since it is human conceived and thus prone to error. This is the very reason why you should never let investment tips weight heavily on your pocket book. Take investing tips as nothing more than a suggestion that you can use a lead to perform further due diligence upon.

Once you learn how to buy the low, you only have the other half of the puzzle to go. The only investing tip I ever adhere to is to not get greedy. If I get the inclination that I should walk away, I do. If I miss out on extra gains, so what? I still have gains. And any gain is better than a loss.

So long as you can identify when YOU feel it is right to buy, and know when you are comfortable walking away with a gain or cutting off a loss, then you have your own bonafide tailor made stock market strategy. Stick with it and hone it over time. This is what all investors do. If someone had a reliable system that gave a reliable ROI, everyone would use it. No such system exists because everyone is different and needs their own person stock market strategies.

So do yourself a favor, use investment tips as nothing more than a hint at something you may want to do further due diligence on while using your own experience to develop stock market strategies that work for you.

Here is a little bit of stock market investing advice.  When considering investment options look first to those that have fallen the hardest.  The old adage says, “buy low sell high”, and it is none sure that now.  The stock market has plummeted and since we are seeing so many companies reach new lows or all time lows then the adage would tell us that now is the time to buy.

Knowing this, beginner stock market investing would tell us that to maximize profit.  We should seek out those that have fallen the furthest and hope that they will rise equally as far as they return to the approximate level they were before the fall.

Because of the stock market crash, we are seeing many double or even triple digit stock prices become stocks under 5.00.  Assuming that these companies will not go bankrupt, and that they have a sound plan for regaining financial solidity, these companies have a very strong chance of returning to the same strength they were before the crash.  This means that in the worst case scenario, where you have a five dollars stock that was once a $10 stock you have a very realistic chance of doubling your investment by buying one is at five dollars.

However, just because a company now priced under five dollars does not make it a wise investment.  Remember that the stock market for beginners can be very difficult.  And that the best way to become good investing is to do your research and due diligence.  And this is always true, but especially true for stocks under 5.00.  So if you decide that you are going to purchase a stock that has fallen substantially be sure, and I mean absolutely sure, of your conviction that it will rise in price, and not actually go down to zero and cost you your entire investment capital.

Although the investing in the stock market has not been my primary choice for an investment vehicle, it is definitely seen as a reputable avenue for earning a decent ROI on your money. Admittedly, I know less about the stock market than I do about real estate, but, and let’s be honest here, the stock market is far less complicated unless you are day trading and studying charts and trending. So if you’re a stock market beginner, listen up.

At the moment I am very amped up on coffee so today I decided to talk about how to compare stock competitors in a sector by analyzing two coffee giants. Since this is a stock market for beginners blog, I will start simple. But before I get to the actual valuation, let’s visit a few of the common terms for the beginners investing for the time.

Before I get to the real meat and potatoes of stock valuation, it is important to understand why you would want to compare two stocks. The reason for comparison is rather simplistic. You want to know how a particular company compares to it’s direct competition. Competing companies and related companies belong to what is called a sector.

For example, two stores that compete to sell auto parts belong to the auto sector. But even a non competing company can belong to the same sector, like a company that rents cars to customers. A rental company does not sell auto parts, but is dependent on the auto sector to provide the produce what they sell. Make sense? In short, a sector is a part of the stock market that centers around a particular product. In the auto sector this would include auto parts, automobiles, auto repair, car rental, etc.

There are many sectors and for today, I will appropriately focus on the coffee sector. The two companies I am going to compare are Starbux (SBUX) and Peet’s Coffee (PEET). Both of these are obviously coffee sellers, but can also fit under larger sector umbrellas like food distribution. But the obvious smallest sector these two companies belong to is coffee.

The first thing I look for when examining potential stock purchases is a cyclic nature. If a stock has a repeating high price value, meaning it never goes above a certain price, and a repeating low price value, meaning it never goes below a certain price, then it is said to be range bound and/or cyclic. All this means is that you will see a pattern in the long term charts of a price that always stays between two values.

If a stock is cyclic then it is not a great long term purchase candidate as the price fluctuations will essentially cancel out any gain/loss you incur. If you are a good trader than a stock like this can be timed for large compounding gains. But that is closer to day trading or swing trading and out of the scope of this article.

So let’s take a look at the real charts for SBUX and PEET. Assume for now that you actually want to invest in this sector because you believe a rebound will occur. Here are the charts for a year:

 

At first glance, peet’s appears to be doing better simply because it is not declining. But is it? To determine this we need to examine a few of the numbers. Starbuck’s EPS is .63, which means for every share the owner gets 63 cents of the earnings. With a share price of 15.53 this means that for every one dollar of earnings you will pay 15.53/.63 = 24.65 dollars. In other words, Starbucks has a 24.65 P/E multiple.

So how does PEET stand up to SBUX? Well PEET has a EPS of .72 and a price of 26.50. This tells us that the P/E is 26.5/.72 = 36.8 dollars for every one dollar of earnings. This makes Peet’s look significantly more expensive than Starbucks. But that would be assuming that each company has equal earnings.

So let’s take a look at the estimated future earnings of each company. Starbucks is estimated to grow earnings by 20% by the end of next year. With a P/E of 24.65 and a growth rate of 20, we know that purchasing SBUX at the current price will mean are paying 24.65/20 = 1.23 for next year’s earnings.

Peet’s earnings for next year are estimated to grow by 21.2%. So by purchasing PEET with an EPS of 36.8 and a growth rate of 21.2, this means we are looking at buying the growth in earnings for 36.8/21.2 = 1.736.

Using this P/E growth rate, called the PEG, we can see that Starbucks at 1.23 is a significantly lower price to pay than Peet’s 1.736. Assuming the market turns around and each company actually meets their estimates, then Starbucks would be a clearly better choice even though PEET is estimated to increase earnings more than SBUX.

In quick summary, the higher the earnings per share (EPS) the better. The lower the P/E ratio the better. And the lower the PEG the better. The latter being the most important as it shows how much you are paying for the stock’s earnings increase compared to that of it’s competitors. I hope this Stock Market for Beginners article will help lead you to your future wealth!

We are looking at a total meltdown of markets as stocks reach record lows. Does this mean that stocks under 5.00 are the safest place for money? In other words, are micro cap and penny stocks really the place where we should be putting our money?

This is not an answer that can get a simply yes or no. First, I do not believe that a deep recession is the right time to invest in in the stock market for beginners. The reason being that if you invest when the market is tumbling down, you are forced to try and game the bottom. And investing in the stock market for beginners is tough enough to have not have to understand all the sectors and individual stocks that may or may not be at their respective lowest.

Again, I do not believe this is the best time to invest in the stock market for beginners. I will give a few things to look for before you begin thinking about investing in the stock market again. Before I do, let’s look at microcap stocks and penny stocks. Basically, let’s look at stocks that are under 5.00

Why would we want to consider stocks that are under 5.00? Simple, the market is at an all time low which implies that many stocks are horribly undervalued because average investors are panicking and dropping out of their shares left and right. This forces the prices to be lower than it should be. This means we have a lot of bargain stocks we can purchase for under 5.00

This is great because if you purchase a stocks under 5.00 then there is a good chance that when the market recovers, you will double, triple, or more, your original investment. A recession is really a good time for bargain hunters in the stock market. When everyone is selling in fear, you should be buying the creme of the crop with a huge grin on your face!

Remember that there is no safest place to invest money, and we have seen just that with the fallout of banking and real estate. Two the most commonly considered safest investment vehicles. So what is the safest place to invest money right now? Probably cash. Since foreign markets are seeing a similar fallout, the dollar is actually holding it’s own, and thus cash seems like the safest place to invest money at the moment.

But, if you’re an investor, then you know that the safest place to invest money is never cash because that means you are losing out on potential returns. So you should always have a discretionary amount of capital that you can invest with out worry. This is the money you should be using to invest in safe stocks for beginners. Stocks that are under 5.00 and really probably to return to significantly higher amounts.

The stock market for beginners can be deceptively frightening. Yes the market is in free fall. But now is the time to start looking at buying. Did I say time to start buying? No. Time to start LOOKING at buying. I personally do not believe we have hit bottom.

So how do we know we have hit the bottom and can then start buying stocks under 5.00? Well, let’s look at the order the dominoes fell.

Real estate hit us first. This would mean investing in REITs for the stock market for beginners crowd. Next we saw the banking sector fallout. Next we could see education, commodities, or something else. Who knows. But the point is, we are still reeling from the terrible loans that killed the stock market.

Why is this important for understanding the safest stocks for beginners to invest money? Well, it would be reasonable to see the dominoes come up in a similar fashion. Namely, the banks fell because no one wants to buy houses, which causes them to default on many loans. So banks are relying on loans to be made to make money. Loans being made means that people are most likely investing in real estate again.

So banks will probably recover after real estate. Just like the order we are falling into the recession. So, for my money, the safest place for money from an investor will be in REITs first. Invest in real estate when you start seeing houses on the market for considerably less time than we do now. When that happens we will know that real estate demand is increasing and stocks for beginners will include REITs that are undervalued. Best if the REIT stocks are under 5.00 and valued at 10.00 or more.

Shortly after we see a huge increase in REITs, look for banks to increase as well. Loans will be made and thus banks will become stronger and regain a footing. This will be the safest time to invest in banks under 5.00

Note that there are not many HUGE banks anymore. This recession has all but wiped out the weakest of banks. Look at the big names, pick which ones you think will get you the biggest return on investment, and buy them. But do not do so until real estate has turned around.

The stock market for beginners should not be as daunting at this point. Turn your money into cash instead of investments, and be patient. When you see real estate turn around, look at buying REITs that have the most probability of going significantly higher. Best if the stocks are under 5.00

Ride the REIT wave a little bit, then start looking for banks to do the same. When you see banks recovering, move your money into them, again preferably is the stocks are under 5.00, and ride that wave.

If we see any other major financial fallouts, look for them to rebound in the same order they fell. Real estate, banks, next, next, etc.

I know that the stock market for beginners can be very intimidating. Just remember that money comes, money goes, and opportunity always exists. You just have to look for it. Start with stocks under 5.00!

For the beginner stock market investing can be very intimidating. You are putting your hard earned cash on the line for a pieces of paper that may or may not turn into more money. Or worse, cost you all of your initial investment.

That is why all of us, at one point or another, seek stock market investing advice. It takes a strong person to recognize that they are not the end all be all on a subject. It can also be horribly humbling to admit that you do not know enough and must seek help with online stock market investing.

But everyone must do it at some point. Some choose the quiet introverted route of buying book after book, or even purchasing video programs to help them improve their online stock market investing game plan. Others will opt to join mastermind groups where they can learn from like minded people who have already learned from the hard lessons they encountered early on in their beginner stock market investing days.

The craziest of all, in my humble opinion, are those that opt to learn by taking the lumps themselves. Although easily the most difficult to stomach, I believe this method will teach people the fastest. Granted, this form of stock market investing carries with it heightened risk. Particularly if you are buying into stocks under 5.00 which carry with them an inherent increase risk through volatility.

What is the best stock market investing advice I can give?

Simple. Make mistakes. Get the hell out there and start putting up or shutting up. Put your money where your mouth is, or you will never make it out of the beginner stock market investing phase. You have to learn. The only way to TRULY learn, is to do. If you do not do, then you may learn, but you will not gain the experience and/or confidence required of a seasoned investor.

Set aside some money you can afford to lose. If you make or, more realistically, lose money. Set more aside that you can afford to lose and do it again. Continue to pay your dues to gain experience. Eventually, and some will encounter this sooner than others, you will start losing less and gaining more. Once you have done so then you will become more confident in yourself as an investor begin moving out of the beginner stock market investing phase.

Even if you have to start with $100, just do it. Nut up and do what has to be done. It is only a gamble until you understand enough about online stock market investing that you can form a strategy. Then, it becomes investing and not gambling.

Perhaps my beginner online stock market investing advice is falling on deaf ears. But for your sake I hope that is not the case.

Beginner stock market investing is the phase we all begin with. This is the part of being an investor that is both the most painful and the most difficult. This is the point in an investor’s life when they take the most uneducated risk and make (usually) the least number of gains.

However, if i were to give any stock market investing advice, then I would say that this is a ‘necessity’ stage. Something that must be endured to ensure success in the long run. Think of being a beginner and losing money as ‘paying dues’. Every occupation has a form of paying dues. The information technology sector will often claim that tech support is paying dues before joining the ranks of help desk, and network administration.

School is more often the form of paying dues for industries like medical and law. And so investing also has a form of paying dues. In other words, to be a successful investor you must take your lumps in one way or another. Often you can get by with the proper education and minimal amount of monetary casualty. But more likely, you will lose what you would consider substantial before you ever begin to meet even mediocre success.

So it comes down to a very real gut check. Can you stomach losing money on the stock market? If the answer is no, then get the hell out. Don’t waste your time. Find something else to do with your money. But if you really feel like you can stand to lose a few bucks and be fine afterward, then online stock market investing just may be for you.

But the only real way to know for sure is to step up to the plate and swing for the fences. Just make sure you don’t put enough on the line that you can’t try again. The important thing is to keep trying and learning until you succeed. Learn from your failed trades. Failure is only failure if you are not able to learn from the situation.

In the end it all comes down to the fact that beginner stock market investing is something we all have to endure. If you are strong enough to handle the dips, then I hope to see you at the finish line after you have paid your dues!

In my travels I get this question a LOT: What is the safest place to invest money? Surprisingly you may already know the answer to that question. We all want a safe place to invest money, but the truth is that no such place exists. I’ll explain further.

First Let’s look at the most common ways you can invest before we get to the safest place to invest money. Typically we tend to see the stock market, real estate, CDs, savings accounts, and the mattress as the safest places to invest money. But how safe are they really?

The stock market is a never ending ebb and flow of ups and downs. A roller coaster of potential. The reason the stock market may not be the safest place to invest money is because the market is literally a place to buy symbolic pieces of papers that can represent anything from goods to currency to shares in a company. Anything that those pieces of paper represent can suffer from incidents that will lower their value. For example, a company goes belly up and all your shares drop in value. You buy several ‘shares’ of potatoes just when some mad scientist discovers how to grow potatoes overnight with a single drop of water. And so on. Most of these risks are typically rather minimal and vary depending on the type market investment you make. But the point is that the market is not the safest place to invest money because it will ALWAYS have the risk of lowering the value of your money due to potentially unforeseen circumstance.

What about real estate? This happens to be my personal favorite. The upside of real estate compared to the risk is amazing. However, is real estate the safest place to invest money? No, of course not. Why? Because real estate is unpredictable and fraught with similar unforeseen risks. You could buy a house and discover later that it was built on landfill and watch as your property value falls to almost nothing before your very eyes. Or it could burn to the ground or collapse in on itself from an earthquake. Or a local gang could move in and turn your rental into a meth house. All of these could lower your investment faster than you can believe. All of these unpredictabilities make real estate definitely not appear to be the safest place to invest money.

Well what about CDs? Certificates of Deposit are often thought to be one of the safest places to invest money. The reason being that CDs are really just like giving a loan to a bank. Typically we all think of banks as being very stable. But the truth is that banks are just like businesses. And like businesses, banks can go belly up. This means that should the bank collapse while you have your cash buried in a CD you can kiss your money, let alone the 3% ROI, goodbye. Though CDs can be insured which makes them about the safest place to invest money. But we aren’t completely done yet.

What about savings accounts? Savings accounts are just like CDs in that you are basically just handing your money to a bank with a promise that the account will not fall below a certain level. If the bank goes away, so does your money. The only reason a savings account is a bit safer is because the account is rather liquid.

This leaves us with storing your money under the mattress. The problem here is that you’re susceptible to theft, fire, etc. But what is more, is that now inflation slowly eats away your stash. With an average inflation of 3% your money will reduce in buying power by 3% every year. Meaning in 33 years your money will be worthless. That’s almost guaranteed.

What does all this mean? This means that there is no safest place to invest money. Every avenue carries with it an inherent risk. What this risk means to you is something only you can decide. Is watching your money erode at 3% a year every year less risky to you than letting a bank borrow it? Is the threat of natural disaster too great to risk investing your money in real estate and watching it double every 5 years? Only you can answer these questions.

So what is the safest place to invest money? That question is something you will have to answer. And so, I ask YOU, what IS the safest place to invest money, for YOU?